Wall Street is apparently betting that tax cuts and deregulation are still coming, because despite Trump's troubles, Republicans still control the White House and Congress.

Federal Reserve chief Janet Yellen agrees that Wall Street is reacting to these stimulus plans, especially on the tax side.

U.S. stocks received another boost on Wednesday after Trump said at a meeting with retail CEOs his administration is "doing a massive tax plan. It's going very well."

Asked on Wednesday why stocks have gone up, Yellen said investors are "likely anticipating shifts in fiscal policy that will stimulate growth and perhaps raise earnings."

Wall Street is also hoping that a corporate tax overhaul will encourage companies like Apple(AAPL) and Microsoft(MSFT) to bring that money sitting overseas back to America for dividends, mergers and real investment.

Ryan Detrick, senior market strategist at LPL Financial, warned that in the short term, "things could have gotten a little overdone" in the markets.

But he said the "broad-based strength" of the rally, which includes small and medium-sized stocks, "bodes well for future gains."

For now, investors don't seem bothered by Trump's less business-friendly campaign ideas. That includes a tough stance on trade that could spark a trade war, promises to break up the banks and threats to the independence of the Federal Reserve.

"Love him or hate him, the market is focusing on the bullish aspects of Trump's plan," Yardeni said, "and dismissing the potential bearish ones."